Operational management of contractual and transactional interactions between buyers, sellers, financial institutions and others involved in the exchange of products for purposes of commerce have typically been labor and time intensive. Generally, the processes of managing transactions between business entities have been unduly burdensome and inefficient.
Financial institutions employ transaction processing parameters that are unique to each institution. In addition, these transaction processing parameters typically need to be kept separate (and confidential), relative to other financial institutions. Often, transaction processing is dependent upon these parameters, which are specific to a particular financial institution involved in financing the transaction. In this regard, transaction processing for portions of a transaction that are related to a financial institution has generally been limited to implementation by a processing engine or system employed by the financial institution participating in the transaction.
When a transaction reaches the payment step, financial institutions for different parties to the transaction must interact with each other. This interaction typically involves complex agreements and associations that facilitate the transfer of funds. At times, there can be delays in payment or disputes regarding terms of payment. In addition, this process is highly susceptible to error. Interaction complexity, delay and error, as well as a multitude of other characteristics of transaction payment can cost one or more parties to a transaction (including financial institutions) a significant amount of funds.
Most industries are quite competitive and any cost savings are therefore important. Administrative costs are targeted for reduction as no revenue is directly generated from administrative functions. However, administrative costs associated with commercial transactions have been difficult to reduce in the current business environment with widely diffused data.
The above and other difficulties in the management and coordination of financial transactions have presented administrative and cost challenges to entities involved in various aspects of transactions, including financial institutions and others.